What defines a credit card?

A credit card is defined as a payment card that allows borrowing funds for purchases. When a person uses a credit card, they essentially borrow money from the card issuer up to a certain limit in order to pay for goods and services. This borrowing is subject to the condition that the user will pay back the borrowed amount, typically with interest if not repaid in full by the due date. This flexibility to borrow against a credit limit makes credit cards a popular financial tool for managing cash flow and making purchases.

In contrast, the other options mention different types of financial products or cards. Overdrafts are related to checking accounts and not the borrowing structure of credit cards. Online shopping is merely a possible use of credit cards but does not define their essential function. Lastly, a loyalty card is strictly for rewards and discounts and does not provide any borrowing capacity.